'Condo Vultures' Zero In on a Dwindling Market

South Florida's skyline is crammed with the telltale signs of a condominium bust.

A huge construction boom led to a condo market that peaked two years ago. Since then sales have stalled and prices have been in a freefall while the construction continues -- creating headaches for sellers but an unlikely opportunity for a handful of realtors who call themselves "Condo Vultures."

Real estate agent Peter Zalewski established his company early this year and named it for the buzzards that descend on South Florida each fall. His mission: introduce aggressive buyers to desperate sellers.

Condo Vultures is a small operation, but Zalewski has big ideas. Because Florida law requires real estate brokers to maintain a physical location, Zalewski rents a a small office tucked into a second-story corner of a commercial building, with a cafe on the first floor and a Cadillac dealership across the street. There's barely enough room in the office for the three desks squeezed inside, a refrigerator and a coffee-maker to fuel Zalewski's caffeine and nicotine-buzzed days. His 16 agents rotate in and out to check on leads from Zalewski and his Web site manager.

Condo Vultures has only sold three dozen properties since the year began, but the company thinks it will be well-positioned when the market does hit bottom, which Zalewski predicts will be sometime next year.

To win the dubious honor of a place on the vulture list, a property must be on the market for more than 100 days or have its listing price reduced already by $100,000 or 10 percent. Zalewski said the bigger the price drop and the longer a property is on the market, the more likely an owner will be desperate enough to accept a low bid. He said some owners are so desperate that they are merely trying to salvage as much of their mortgage as they can.

Feeding Frenzy

"He's already upside down," Zalewski said about one owner listed on the database. "He's essentially trying to cut the cement block attached to his ankle and get up to the surface, realizing that even after he gets to the surface he's still likely to be required to cover the difference."

This owner is not alone -- South Florida has become a feeding frenzy for condo vultures. According to Zalewski, about a dozen 50-story towers with four 500-unit complexes are being built on a narrow stretch of the barrier north of Miami Beach in communities like Sunny Isles and Hallandale.

In the Miami area, speculators predict that 24,000 new condos will be completed in the next two years -- properties that have already been bought by speculators who hoped to "flip" them when the latest building boom began two years ago. It was then -- October 2005 -- that prices were at their peak.